Sep 4, 2026 · 35 min
Australian retail squeeze exposes deep cracks as Cettire nears the edge
Retail Deep Dive: Kogan shows the money and Cettire close to the edge
Understanding the structural weaknesses of overleveraged online retailers helps investors spot market bubbles before they burst.
- 1A sluggish housing market and high inflation are driving a stark divide between resilient and failing Australian retailers.
- 2Luxury online retailer Cettire faces severe distress with massive losses and going concern doubts on its balance sheet.
- 3Direct-to-consumer brand Koala proves that high-margin strategies can still deliver profitable growth in a tough market.
Don't miss
The detailed breakdown of Cettire's balance sheet discrepancies and the suspicious interest payments signaling its collapse.
The brief
Australia is facing a severe retail downturn as inflation and a sluggish housing market squeeze consumer spending. Yet, hosts Adam Schwab and Adir Shiffman argue this pressure is separating high-quality operators from structurally weak business models.
While traditional giants like JB Hi-Fi and Kogan show resilience, online luxury retailer Cettire is facing a dramatic collapse. The hosts dissect Cettire's disastrous financial results, pointing to massive losses and mounting going concern doubts.
The downfall of Cettire highlights the power of shorting overvalued retail stocks. Schwab and Shiffman explain how they identified these structural vulnerabilities early, warning that similar speculative bubbles are now forming in the AI sector.
Despite the broader economic gloom, direct-to-consumer brand Koala is proving that profitable growth is still possible. High-margin strategies and disciplined operations are allowing select retailers to thrive and present major buying opportunities.
What was said on this episode
32 statements · 16 positive · 15 negative · 1 mixed
Kogan First drives Kogan’s business and is underrated by the market.
“Kogan's business is really led by the performance of its Kogan First subscription business that continues to be really underrated by the market.”
Listen at 4:01
Consumer discretionary retailers depend heavily on people moving houses.
“these are all consumer discretionary spending businesses and very reliant on effectively people changing houses.”
Listen at 5:13
Kogan is more defensive than other discussed retailers.
“Kogan's much more defensive.”
Listen at 5:24
Rising property prices increase perceived wealth and consumer spending.
“When property prices are going up a lot, people calculate how much their house is worth and they feel rich and they spend more money.”
Listen at 5:58
Retail markets are about to offer many buying opportunities.
“I think we're about to get um, a whole lot of buying opportunities in the retail market”
Listen at 6:50
Consumer discretionary retail will enter a downturn.
“I think we're going to go into a slide in consumer discretionary retail.”
Listen at 7:04
Consumer discretionary retailers will initially experience further pain.
“so first I think it's going to be pain.”
Listen at 7:10
Furniture retailers face greater downturn exposure than JB Hi-Fi and Kogan.
“I think the worst is the furniture, then maybe it's a step down to JB, then it's a step down to Kogan.”
Listen at 8:04
The retail businesses discussed will perform poorly in the short term.
“I don't think it's going to be good for any of them in the short term, is the bottom line.”
Listen at 8:44
Kogan is a reliable low-price retailer.
“I think Kogan is well known for being reliable at a cheap price.”
Listen at 8:53
Prize-entry subscription businesses face significant problems.
“that category of business has got some problems.”
Listen at 10:10
Kogan may outperform as discretionary spending declines.
“Kogan should be less affected by the downturn in discretionary spending and might get a bit of a tailwind.”
Listen at 10:34
Kogan would benefit from David Schaefer remaining at the company.
“it's better if Schaefer stays.”
Listen at 10:53
Kogan will survive if David Schaefer leaves.
“If they can't, like, they'll survive.”
Listen at 11:11
Nick Scali’s brand supports prices exceeding its furniture’s actual quality.
“Nick Scully sells furniture that has, in my view, a much higher perceived quality and thus a much higher price than actual quality of the furniture itself.”
Listen at 11:35
Investors should wait to buy well-run retailers at cheap prices.
“you pick the companies that you think are the best-run companies, just wait for them to get to a cheap price”
Listen at 12:39
JB Hi-Fi is a strong retailer and its market will eventually recover.
“It's a really good retailer and the market will eventually turn.”
Listen at 12:58
Adairs is undergoing a turnaround.
“One is the turnaround of Adairs.”
Listen at 13:11
Investors should avoid Temple & Webster among these retailers.
“Temple Webster is like, that's not the good one in this category at all. So that's one, you know, we think we should, we should avoid that one.”
Listen at 13:39
Koala has achieved genuinely profitable growth in Australian retail.
“Koala is one of the few retail businesses in Australia that has recorded genuinely profitable growth.”
Listen at 15:33
Koala and Nick Scali have built high-margin businesses.
“both of those businesses have built a very good margin business.”
Listen at 16:48
Cettire’s underlying loss was $12.5 million before further adjustments.
“their real loss was $12.5 million. But, but there's more.”
Listen at 21:48
Cettire’s liquid assets are materially below its current liabilities.
“the balance sheet begs to differ, with the company, uh, stating they had cash of $28 million and trade receivables of $16 million versus current liabilities of $101 million.”
Listen at 22:16
Cettire likely exhausted cash and borrowed to continue operating.
“they basically ran out of cash, had to desperately borrow got some cash in from whatever, and basically hand to mouth, day to day at the moment, trying to keep the lights on.”
Listen at 25:00
NeoCloud companies are likely to become the next major short opportunity.
“I think NeoClouds are the next big short.”
Listen at 27:32
Temple & Webster could fall at least another half from its current level.
“I think you can keep shorting Temple Webster. You've got another at least half.”
Listen at 29:03
Cettire’s $89 million valuation is effectively worthless.
“The $89 million valuation spike, it's really effectively zero.”
Listen at 29:18
Anthropic’s $2 trillion valuation appears unjustifiably high.
“Anthropic at $2 trillion, like, that just seems completely ridiculous.”
Listen at 31:54
Waiting six months may create opportunities to buy quality businesses cheaply.
“if you're a bit patient and you wait another 6 months for this negative sentiment to sweep through, you might actually be able to buy some great businesses for a cheap price”
Listen at 33:05
Cettire is a bad business, unlike JB Hi-Fi, which is a quality business discounted for sentiment.
“something like a Zettire now is just a bad business. But versus the JB Hi-Fi, great business but been marked down on sale versus Zettire marked down for a reason.”
Listen at 33:35
Disney’s depressed share price will eventually recover.
“Great business, great powers, but share price shocking, market hates it. Like you think that will eventually in time bounce back.”
Listen at 33:55
Investors should buy retailers whose stores are visibly full.
“Buy those companies.”
Listen at 34:13
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
